Question 1

In a manufacturing environment,costs of materials initially flow

Accepted Answer

A) into the Work in Process Inventory account. 
B) into the Materials Inventory account. 
C) into the Cost of Goods Sold account. 
D) into the Finished Goods Inventory account. 
A) into the Work in Process Inventory account. 
B) into the Materials Inventory account. 
C) into the Cost of Goods Sold account. 
D) into the Finished Goods Inventory account.

Question 2

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Accepted Answer

A) materials inventory costs. 
B) cost of goods sold. 
C) work in process inventory costs. 
D) finished goods inventory costs. 
A) materials inventory costs. 
B) cost of goods sold. 
C) work in process inventory costs. 
D) finished goods inventory costs.

Question 3

Manufacturing costs behave as variable or fixed costs.

Accepted Answer

A) True 
 B)False

Question 4

A supply chain includes only processes and services that add value to the final product or service.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a product cost?

Accepted Answer

A) General expenses 
B) Selling expenses 
C) Advertising expenses 
D) Material handling expenses 
A) General expenses 
B) Selling expenses 
C) Advertising expenses 
D) Material handling expenses

Question 6

Which of the following is a difference between managerial and financial accounting?

Accepted Answer

A) Managerial accounting reports non-monetary information whereas financial accounting reports both monetary and non-monetary information. 
B) Managerial accounting is used by government authorities whereas financial accounting is used by stockholders. 
C) Managerial accounting prepares reports monthly whereas financial accounting prepares reports annually. 
D) Managerial information is confidential whereas financial accounting information is publicly available. 
A) Managerial accounting reports non-monetary information whereas financial accounting reports both monetary and non-monetary information. 
B) Managerial accounting is used by government authorities whereas financial accounting is used by stockholders. 
C) Managerial accounting prepares reports monthly whereas financial accounting prepares reports annually. 
D) Managerial information is confidential whereas financial accounting information is publicly available.

Question 7

Assume you are the president of the business club at your school.You are thinking about creating a fundraising project to generate money for next year's operations.Develop an outline of your ideas using the various stages of the management process.
Note: Student answers will vary considerably;however,they should adequately cover the four stages of the management process.An example answer is given below.

Accepted Answer

Plan: Under strategic planning,you need

Question 8

Minor materials and other production supplies that cannot be conveniently traced to specific products are accounted for as indirect materials.

Accepted Answer

A) True 
 B)False

Question 9

Velocity Ltd.is a sports car manufacturer.Which of the following is a value-adding cost for Velocity?

Accepted Answer

A) Salary of the payroll department 
B) Cost of tires used in cars 
C) Cost of office supplies 
D) Salary of operations manager 
A) Salary of the payroll department 
B) Cost of tires used in cars 
C) Cost of office supplies 
D) Salary of operations manager

Question 10

Recording cost of goods manufactured increases the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 11

Product unit cost is computed by dividing the cost of goods sold by the number of units sold.

Accepted Answer

A) True 
 B)False

Question 12

Conversion costs consist of

Accepted Answer

A) direct materials costs and direct labor costs. 
B) direct labor costs and overhead costs. 
C) direct materials costs and overhead costs. 
D) direct labor costs and indirect labor costs. 
A) direct materials costs and direct labor costs. 
B) direct labor costs and overhead costs. 
C) direct materials costs and overhead costs. 
D) direct labor costs and indirect labor costs.

Question 13

Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.

Accepted Answer

A) True 
 B)False

Question 14

Materials costs flow from the Materials Inventory account to the Work in Process Inventory account to the Finished Goods Inventory account.

Accepted Answer

A) True 
 B)False

Question 15

In a manufacturing company,the cost of direct materials,direct labor,and overhead will most likely become a part of the Cost of Goods Sold account balance.

Accepted Answer

A) True 
 B)False

Question 16

Direct materials are the only materials used in a product.

Accepted Answer

A) True 
 B)False

Question 17

A manager should focus on the purpose of a report while preparing it.

Accepted Answer

A) True 
 B)False

Question 18

The four stages of the management process are: planning,performing,evaluating,and communicating.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a reason to classify costs as either product or period costs?

Accepted Answer

A) To determine unit manufacturing costs 
B) To determine if the costs are fixed or variable 
C) To analyze costs for control purposes 
D) To report production costs on the income statement 
A) To determine unit manufacturing costs 
B) To determine if the costs are fixed or variable 
C) To analyze costs for control purposes 
D) To report production costs on the income statement

Question 20

The costs of materials used in production are transferred from the Materials Inventory account directly to the Cost of Goods Sold account.

Accepted Answer

A) True 
 B)False

Exam 17: Managerial Accounting and Cost Concepts

In a manufacturing environment,costs of materials initially flow

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Manufacturing costs behave as variable or fixed costs.

A supply chain includes only processes and services that add value to the final product or service.

Which of the following is a product cost?

Which of the following is a difference between managerial and financial accounting?

Minor materials and other production supplies that cannot be conveniently traced to specific products are accounted for as indirect materials.

Velocity Ltd.is a sports car manufacturer.Which of the following is a value-adding cost for Velocity?

Recording cost of goods manufactured increases the Work in Process Inventory account.

Product unit cost is computed by dividing the cost of goods sold by the number of units sold.

Conversion costs consist of

Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.

Materials costs flow from the Materials Inventory account to the Work in Process Inventory account to the Finished Goods Inventory account.

In a manufacturing company,the cost of direct materials,direct labor,and overhead will most likely become a part of the Cost of Goods Sold account balance.

Direct materials are the only materials used in a product.

A manager should focus on the purpose of a report while preparing it.

The four stages of the management process are: planning,performing,evaluating,and communicating.

Which of the following is not a reason to classify costs as either product or period costs?

The costs of materials used in production are transferred from the Materials Inventory account directly to the Cost of Goods Sold account.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

Filters